Pre test correct answers 12/30/15

If adverse action is taken against a consumer based on credit information, within what number of days must either a credit report or insurance score calculation be obtained with reference to the date the policy was first written or renewal was issued?

(***90 days***)

What is the maximum civil penalty that can be imposed for a single cause of license suspension, revocation or denial?

A civil penalty of up to (***$10,000***) may be levied against a producer per cause of license suspension, revocation or denial.

If an appeal hearing takes place at the request of the insured for the cancellation or nonrenewal of a personal auto or fire policy, what is the maximum cost to the losing party?

A cost not to exceed $100

An insured has owned the same fire policy on his home for six years. If his insurance company nonrenews this policy for an allowed reason, how many days notice are required?

A personal fire policy which has been in effect for five or more years is not allowed to be canceled by a company unless the insured receives a nonrenewal notice at least (***60***) days in advance (only thirty days advance notice is required if the policy has been in effect for less than five years)

Commercial lines policies require the insurer to provide how many days notice of an intent not to renew?

A notice of intent not to renew a commercial lines policy must be mailed at least 60 days (with specific reasons) to the first named insured.

Producer S brokered slightly more than $40,000 in insurance premiums last year. Based on this premium amount, what is the penalty (face) amount of the surety bond S is required to maintain in favor of the people of Illinois?

A producer who is required to maintain a surety bond must hold a bond in the amount of $2,000 minimum or 5% of the previous (2,500*** face amount) year's brokered premiums, whichever is the greater amount up to a $50,000 penalty amount maximum.

A homeowners policy may be canceled for any of the following reasons, EXCEPT

A property or casualty policy cannot be canceled solely because the writing producer is no longer with the insurance company.

A homeowners policy may be canceled for any of the following reasons, EXCEPT:

A property or casualty policy cannot be canceled solely because the writing producer is no longer with the insurance company.

Under the Insurance Claims Fraud Prevention Act all of the following are privileges or responsibilities insurance companies have, EXCEPT:

A: The ability to object to the use of information compiled under the Act. Relevance of information under the Act is determined by the Director and insurers have no right of objection under this law to any such determination made by the Director.

If one person defaces the property of another person, it may NOT be considered a hate crime if the vandal's motivation to cause the damage was solely based on

A: The income of the Victim Hate crimes must be due to the victim's race, color, religion, ancestry, national origin, disability, gender or sexual orientation; income levels are not mentioned under the law as a protected class.

When an auto is equipped with an appropriate anti-theft device, insurers must allow a discount on comprehensive coverage that is no less than which of the following percentages?

An insurer must allow a discount on comprehensive coverage they deem appropriate but the discount can be no less than (***5%***)

Which insurance companies are required to participate in the Illinois assigned risk pool for Workers' Compensation?

All companies licensed to write Workers' Compensation and employers' liability insurance in Illinois must participate in the Assigned Risk Pool.

Property Quiz: Question 4 Which of the following insurance contracts must have provisions outlining the manner in which policies can be canceled or nonrenewed in Illinois?

All property and casualty policies must have clauses that address the manner in which the policy can be canceled or nonrenewed.

What is the minimum penalty when a person knowingly provides a fraudulent address as an applicant for a policy of motor vehicle insurance?

An applicant for motor vehicle insurance must provide the actual address at which they reside to the insurance company and if they knowingly violate this law, they are guilty of a business offence. The penalty is a fine of not less than $1,001 nr more than $1,200.

Which of the following is NOT an allowed action by an auto insurer solely based on the identity of the insured's previous auto insurance carrier?

An auto insurer may not impose a surcharge or refuse to insure solely based on the identity of the applicant's previous auto insurance carrier.

An insurer has decided to increase dwelling premiums by 40 % upon renewal by all policyholders. How much advance notice must this company provide to policyholders of such a premium increase?

An insurance company must provide 60 days advance notice before the effective date of any material change in coverage. Material changes include premium increases of 30% or more as well as changes to deductibles and other material alterations in coverage.

When an auto is equipped with an appropriate anti-theft device, insurers must

An insurer must allow a discount on comprehensive coverage they deem appropriate but the discount can be no less than 5%.

People working with insurers who belong to the following organizations are exempt from licensing, EXCEPT:

Any person who is paid by commission directly from the sale of an insurance contract must hold the appropriate producer licensing authority.

All of the following statements pertaining to a person who has had their producer license revoked are true, EXCEPT:

Any person who suffers suspension, denial or revocation of license may not be employed, contracted or engage in any insurance related capacity during the period of imposed suspension, revocation or denial.

Which of the following provisions is not allowed in an auto policy issued in Illinois?

Any standard or optional equipment of the vehicle may be excluded by the insurance company or justify an additional premium

To qualify for placement through the IAIP, a driver must meet all of the following requirements, EXCEPT:

C: Be at least 21 years of age. There is no age registration for the Illinois Automobile Insurance Plan but the driver must be licensed, the state vehicle registration must be in order and the driver was rejected by at least three carriers in the normal market.

Selling insurance without a license without misappropriating premium funds is a

Class A misdemeanor

Which of the following criminal activities is most likely to lead to the termination of a producer's license?

Embezzlement is a serious crime of theft which will result in a felony conviction while all of the other examples given in the answer section are not severe enough to warrant felony charges.

If an insurance company fails to provide loss information in a timely manner too frequently, such behavior will

If a carrier fails to provide required loss information on a regular or frequent basis it constitutes an UNFAIR TRADE PRACTICE.

A personal auto policy which has been continuously in effect for more than five years MAY NOT be nonrenewed for which of the following reasons?

On the basis of nonpayment of premiums. Once a personal auto policy has been in effect for more than five years it cannot be nonrenewed on the basis of nonpayment of premium (however, of course such a policy may be canceled due to premium nonpayment).

It is legally permissible for a producer responsible for a Premium Fund Trust account to place interest bearing funds into all of the following investment vehicles, EXCEPT:

PFTA funds can only be placed in highly rated municipal bonds funds maturing in no longer than one year.

Commercial lines policies require the insurer to provide how many days notice of policy cancellation if the policy has been in force for forty-five days and the reason for cancellation is other than for nonpayment of premium

Insurers must supply at least 30 days notice for cancellation of a commercial lines policy during the first 60 days of coverage and the reason for cancellation is other than nonpayment of premium

Written defamation is known as

It is Libel when unfouned written statements are made intentionalli injure the reputation of another.

Which of the following may be an allowed reason for an insurer to cancel a property policy?

It is a valid reason to cancel or nonrenew if the reinsurer of the insurance company is certified as being lost to the writing carrier and the policy has been in force at least 30 days but less than one year.

Which of the following statements about an insurer's intent not to renew a property or casualty policy is the most accurate?

It normally takes Commercial Insurance customers more time to assess property and casualty risk transfers needs therefore the law requires carriers to provide more advance notice of the intent not to renew to commercial customers compared with personal lines customers.

An agent makes pejorative statements about another agent. This may be an example of

Making disparaging or belittling comments about another licensee may be construed as defamation, an unfair business practice.

An insured receives a cancellation notice from the insurer and calls the producer who wrote the policy to review the reasons over the phone. The insured feels that his good name has been defamed based on the written notice and the producer's review of the reasons with the insured during the phone call . The insured:

May not bring any legal action in this situation. Illinois law prohibits legal action or liability to any company, agent, employee or hired firm that deliver cancellation notices, either orally or in writing, either for the cancellation reasons or for providing such information to an insured.

What is the maximum number of continuing education credits which can be earned by taking a single certified course?

No continuing education course may be certified for more than 12 credit hours

If an insured can demonstrate that a property loss was caused by a hate crime, an insurer may not cancel, refuse to issue or refuse to renew a property policy if such a claim has been paid within which period of time?

Property losses paid due to a hate crime within the last 60 months do not allow an insurer to use the payment of such a claim or claims to cancel, refuse to issue or refuse to renew a policy solely upon such a basis.

The renewal rates for personal insurance of property and casualty may not be based

Solely upon credit information

A producer is advising an insured to cancel an existing dwelling policy and replace it with a policy written by his company. What required information must this producer provide to the insured in this circumstance?

That cancellation by an insured of an existing policy may result in additional cost to the insured

Which entity decides whether or not a course program enables a qualifying aged driver to obtain a defensive driver's discount?

The Secretary Of State

If all conditions have been met, within how many days must an auto insurer disclose the amount of liability coverage that is in place on an insured upon receipt of written request for such disclosure?

The information must be forwarded to the requesting party with 30 days of receipt of the request for liability coverage disclosure.

The Insurance Claims Fraud Prevention Act gives the Director the power to make reasonable rules that require the insurance companies to

The purpose of this law if to help the Director determine the detection of fraud or arson by requiring insurers to report certain information to make this detection possible.

Which of the following coverages are not subject to Illinois nonrenewal notice laws?

Written binders of 60 days or less, a copy of which is supplied to the insured, are not subject to state nonrenewal notice laws.

According to Illinois use of credit rules, none of the following factors can be used by an insurer in the calculation of a an insurance score for consumers for underwriting purposes, EXCEPT:

credit score Use of insurance scores based on income, nationality and marital status are some of the factors that may not be used in generating a consumer insurance score, however credit score can be used as a factor, just not the sole factor, for underwriting purposes.

The insured has paid a premium for one full year but decides to cancel the policy after six months. The insured is entitled to a short rate refund on all of the following forms of coverage, EXCEPT

nytime the insured cancels a policy the refund they are entitled to will be a short rate refund except in the case of auto insurance which requires a pro rate refund no matter which party initiates the cancellation.

The Illinois Automobile Insurance Plan (IAIP) exists to

to provide auto insurance coverage to drivers who could not normally obtain such coverage through normal insurance channels